The financial condition in France was in a pitiable state. Louis had almost bankrupted France with a 3 million livre debt. In order to increase the taxes to offset this permission was needed from all three estates.
The Estates General was convened on 5th May 1789 at Versailles comprising representatives from all three estates.
The members of the third estate gathered on 20th June, 1789 in Versailles and declared themselves as the National Assembly and decided to draft a constitution that would limit the powers of the King.
Their key leaders were Mirabeau and Abbe Sieyes. On August 4th 1789 Louis recognized the National Assembly and agreed to abide by their framework. The National Assembly abolished the feudal system of taxes, tithes and the special privileges enjoyed by the clergy and nobles by birth.